PVMI Request for Proposals

PVMI Request for Proposals

Sublicense for production and marketing of new specialty yellow potato with red eyes

The Potato Variety Management Institute (PVMI) has established a relationship with the Oregon State University (OSU) potato breeding program, which has developed a specialty potato with yellow skin, red eyes and yellow flesh that appears to have unique potential in fresh and processing markets. The potato will be licensed to PVMI under an established licensing agreement.

PVMI is proposing to sublicense the new variety, POR02PG26-5, to one private company exclusively to allow full development of the market potential of the line.

Proposed Sublicense Terms  

PVMI seeks proposals that will include the following:

1)      An exclusive sublicense will be offered for the production, use and marketing of the potato variety POR02PG26-5. The sublicense will be awarded based on established production and marketing experience and demonstrated abilities to successfully manage seed stocks, produce and market potato varieties. A sublicensee will have the right to, and is encouraged to, offer further sublicenses of this variety to third parties. The exclusive sublicense being offered pertains only to POR02PG26-5 and does not obligate PVMI to sublicense any other varieties or germplasm.

2)      The sublicense duration will be for up to five years and will terminate on or before Jan. 1, 2020. A shorter period can be suggested by the sublicensee. Prior to this ending date, a decision will be made by PVMI to renew the sublicense, to seek other sublicenses, or to terminate the sublicense and openly release the line. During this process, the sublicense and performance of the sublicensee will be subject to review by PVMI and its member commissions.  

3)      Performance of the sublicensee will be reviewed annually to evaluate progress made toward stated production and marketing milestones. An annual report must be provided to PVMI by Jan. 31 for the preceding calendar year’s activities. The following information must be provided as part of this annual report:

• Identity and activity of any of sub-licensees
• Number of growers involved in production of POR02PG26-5, listed by county and state
• Average grower acreage
• Acres harvested in the preceding year and acres planned for the coming year
• Average yield by production zone or county in the previous year
• Total production in previous year
• Quality characteristics of previous year’s production
• Current status of previous year’s productionBenefit to
  • Potatoes in storage
  • Potatoes sold
  • Potatoes culled
• Pacific Northwest growers for program participation
• Agronomic performance observations/concerns POR02PG26-5 RFP
• Market intelligence information that may be of use to PVMI in refining cooperative breeding program objectives with PNW university partners

4)      An economic compensation plan to the Tri-State Breeding Program via PVMI must be presented. This plan must include a negotiated, one-time, non-refundable sublicense fee which is due upon granting of the sublicense.

The economic compensation plan can be creative. PVMI and OSU understand that the sublicensee will be assuming more than normal risk in developing markets for this variety. The proposal evaluation committee is willing to consider plans that include additional sublicenses under the sublicensee who will help share this risk as well as potential rewards for successful market development. Royalties based on such factors as commercial production tonnage or percent of sales are options. The committee is looking for a well considered market development plan with specific milestones.

5)      All royalties and sublicense fees as outlined in the economic compensation plan are to be paid to PVMI by Jan. 31 for the preceding calendar year.

6)      Sublicensees may enter into contractual agreements with others to fulfill the terms of their sublicense. The sublicense terms, obligations, and liabilities remain the esponsibility of the sublicensee and may not be assigned.

Proposal Process

Applications are due by April 30, 2014. Proposals must document eligibility, experience, and provide a marketing plan for review by PVMI which includes the following:

1)      Identify the intended use(s) of the line for which a sublicense is being sought—fresh, processing, industrial (component extraction for specific uses), or specialty seed markets (small-scale organic growers, home garden, etc.).

2)      Document experience in potato production and marketing including, but not limited to the following:

• Seed stock production and/or management
• Specialty potato marketing experience
• Market development experience

3)      Provide a comprehensive Production and Marketing Plan. The plan must include timelines for specific activities and production expectations. Supporting information and documentation should be included as appropriate to demonstrate the plan is viable and sustainable. The plan should address the following:

• Management of seed and product
  • Projections for production and sales
  • Increase and management of certified seed stocks
  • Plans for PNW grower participation in production of crop including production area and acreage allocations
  • Criteria and timeline for expansion of grower base and production area
• Marketing
  • Market development efforts and activities
  • Evidence of market commitment, demand or interest expressed by potential customers
  • Strategies for transportation and delivery
  • Assurance of crop quality
  • Disposition of out-of-specification or surplus stocks POR02PG26-5 RFP
• Other criteria
  • If several entities are involved in a proposal, specifically identify the role of each entity in production and/or marketing
  • Statement of how the proposed plan will specifically benefit PNW growers and the rural PNW economy
  • Statement of anticipated royalty stream to PVMI
  • Existing stocks of seed growers of POR02PG26-5 will be either purchased by the successful party(s) or will be allowed to continue to grow but not in competition to the purposes of the successful sublicensee(s).

4)      Any other information you wish to provide that you deem appropriate for consideration in the evaluation process.

5)      Prior to issuance of a sublicense, the applicant must warrant that the following conditions and criteria are met and must provide documentation to assure compliance. These conditions remain in effect for the duration of the sublicense:

• The sublicensee and/or entities working with them to produce seed stock must be in good standing with the Association of Official Seed Certifying Agencies and their member state seed certification agencies.
• The sublicensee must not have been convicted of any violations of business or licensing laws in the state(s) in which the applicant intends to do business. If violations have occurred and the violation has been effectively resolved, an applicant may appeal this requirement.
• The sublicense must maintain general liability insurance coverage in excess of $1 million dollars per occurrence of bodily injury and property damage against any claims, or causes of actions or damages—including reasonable attorneys’ fees—that may be related to seed or commercial crop production, sales, or marketing of the sublicensed variety.

Selection and Licensing of Applicants

Applications will be reviewed by an evaluation committee that includes members of the PVMI Board, potato breeders and Oregon State University, but does not include any party that might be competitive or gain advantage by information contained within proposals. Applications will be scored against the criteria outlined in this RFP and will be evaluated relative to the review team’s assessment of the applicant’s ability to establish a sustainable market for POR02PG26-5. Approval of an application does not obligate PVMI to sign a sublicense agreement should the parties fail to agree upon terms or conditions. Furthermore, the sublicense may be terminated at any time by PVMI based on non-performance of the sublicensee or by mutual agreement according to terms agreed upon in the Agreement.

Once a proposal has been identified for discussion of Business Plan and Financial Terms, parties will negotiate for adoption of PVMI sublicensing agreement. Successful applicants will enter into a sublicensing agreement with PVMI.

Applications are to be sent by April 30, 2014 to:

Jeanne Debons

PVMI Executive Director

60380 Chickasaw Way

Bend, OR 97702-9724

Phone: 541-318-1485

FAX: 541-318-7561 POR02PG26-5 RFP

jeannedebons@msn.com

POR02PG26-5 is a midseason specialty potato with yellow skin, red eyes and yellow flesh. This selection is unique among commercially available varieties for its bright red eyes and high culinary quality. Tubers are ideal for microwaving, frying or baking. Fry color is light and uniform. The variety has low defects with a specific gravity around 1.087.

Tubers are round and smooth with good skin set and shallow eyes that are well distributed across the tuber. POR02PG26-5 has produced higher yields than Yukon Gold in regional specialty trials conducted in 2007 and 2008.

POR02PG26-5 has few surface blemishes and internal problems, significantly less than those found in Yukon Gold. It produces a higher amount of No. 1s with a smaller average tuber weight and more tubers per hill. Harvest needs to be managed to minimize shatter bruise.